I often find myself in discussion with some Homelanders and Obama supporters about whether US citizenship-based taxation is a human rights abuse. Below is my argument, first published August 21, 2012, to say that it is unfair. Now I argue that with the implementation of FATCA, the USA has become a serial human rights abuser. Clearly, most people of reasonable conscience accept these kinds of arguments. Even yesterday, I manage to get a chuckle out of an AP reporter who was asking for my story. I mentioned my birth in Chicago, Illinois, and moving as a baby to Alaska. Off the cuff, I said, “Yet Illinois isn’t chasing me around the globe expecting me to pay state income tax.” That’s because once you leave a state, you can no longer benefit from the proceeds of taxation. It is a no brainer. Yet it is not self-evident to Congress and the IRS, which are pursuing US expats across the globe with FATCA regulations in order to make them pay taxes for the benefit of Homelanders.
Many Homelanders are a special breed of bigot who believe that you live abroad so that you can shirk your responsibility to pay for their Social Security, their Food Stamps, their welfare, and their wars across the globe. Well, I for one am sick of this unfair treatment. We pay taxes in our countries of residence, and in Canada in particular, our tax burden is already much heavier than what Homelanders pay. So it is really time to emphasize that Citizenship-Based Taxation is a violation of the fundamental principles of Western democracy, and it is a human rights abuse.
Fair tax, unfair tax: or When is it paying my fair share?
by Peter W. Dunn
In studying historical tax rebellions, I have observed that governments have frequently been ready to commit mass murder in order to maintain their tax hegemony over a people. South Korea committed mass murder against the poor tax revolters on Jeju Island, who rose up in rebellion in 1948; Californians rode out to suppress the Indian tax revolters in 1851; Britain waged war against American colonists who unilaterally declared a permanent tax holiday from King George; the Romans razed the Temple at Jerusalem and crucified the anti-tax zealots in the Jewish War of succession in AD 66-70. Even George Washington, the beloved president who cut down the cherry tree but could not lie about it, personally led the troops against the Western Pennsylvanian tax protestors in the Whiskey Rebellion. No nation which wants to be taken seriously can ever allow a tax revolt. That’s why Irwin Schiff, father of investor Peter Schiff, rots in a Federal prison.
There are lessons to be learned from these examples. The revolts in question in every case took place because the protestors felt that the taxes were unfair. If the tax really is unfair, then protestors will revolt in large numbers, forcing the taxing authority to act. So I’ve decided to point out some aspects of fair taxes which people are willing to pay, compared to unfair taxes that leads to tax revolts.
Fair taxes seem to me to have the following characteristics:
- A fair tax is not onerous and well within the ability of the citizen to pay.
- A fair tax is part of democratic process in which the citizen has a right to vote for a local person who represents the taxpayer’s area in a legislative assembly. Representation in the legislative assembly is also proportional to population.
- A fair tax is proportional, i.e., charges all citizens proportionally to their means and not disproportionally.
- The proceeds of a fair tax must benefit the community of which the taxpayer is a part.
- Penalties for failing to pay a fair tax are proportional to the crime and the damage to the government which claims a right to collect taxes.
The following are characteristics of unfair taxes which will lead to revolt:
- An unfair tax is taken without local representation in a legislative assembly that makes tax law.
- An unfair tax is disproportional and onerous.
- An unfair tax does not benefit the community of the taxpayer but rather, it benefits the needs of others.
- An unfair tax is a weapon to destroy the taxpayer’s community or to make sure that that community never rises in prominence or wealth.
- An unfair tax comes with stiff penalties for disobedience–penalties which include destitution, detention, and death.
- An unfair tax results in the alleged protector becoming the chief enemy and persecutor of the taxpayer.
As any casual observer can see, the United States taxation of its expats fits the description of unfair taxes that I here provide. (1) It is done without local representation; (2) it is disproportional and onerous, not taking into account the taxpayer’s other tax burdens–e.g., Canadians already pay about 50% of their income in Federal, Provincial and Munipal taxes–including taxes for which there is no foreign tax credit (GST/HST); (3) it is done for the benefit of Homelanders not for the communities of the expats; (4) it unfairly taxes the expat’s home countries tax bases to the weakening of those countries for the benefit of the profligacy of the United States; (5) the penalties for failure to comply with US extra-territorial taxation may result in the detention and destitution of the taxpayer–it often leads the taxpayers to renunciation of citizenship, and can even result in exile [Reed Amendment] or death, if the taxpayer commits suicide or resists arrest; (6) The United States has made itself the chief enemy and persecutor of expats.
Historians seldom look back favorably upon regimes that institute unfair taxation. History is now in the making. Will the United States continue down this path of demagoguery and despotism? Will it commit total annihilation of its own expat community through a form of Expat Cleansing which forces all Americans abroad either to renounce their citizenship or return to the homeland? I think so. I see no real signs that this situation will change but only that it will get worse. I hope that I am wrong. Historians will remember this generation of leaders in the United States under a very dim light, and the Isaac Brock Society will be a primary source for their understanding of this period.
My husband likes to watch a lot of alternate American news where they’re always talking about how the world is ending for the US. Every time I see one of those I think gee I hope that’s not really true but the last 5 years have been so bad down there it’s hard to think otherwise. So depressing …
As an American Abroad I agree that the USA and all other countries should go after tax cheaters anywhere. However the Americans Abroad should not be included in this category with incredible demands and draconian fines. A trap.
@Stressedman
The Americans’ approach to catching multi millionaire tax cheats is kind of like trying to catch a bank robber by killing all the bank’s customers in the process. But it’s the American way. I hope they wear themselves out soon.
@Stressedman:
By tax cheats you might mean GE head ? Owed over 4 billion ( yeah, that’s 4 Billion with a B) but one forgets he is a great friend of the administration who visits WH often. And he is not even abroad. Right in their face!
We all know this is not about tax cheats. Geitner being one and admitted it and still was head of Treasury. Really. And the excuse? A shrug of the shoulders.
Reading through the IGA and the ‘compliance’ tome of doom it is clear who they are after and it is not hard to know why: Debt ceiling was not even fought over by those milquetoast Republicans ( what skeletons in THEIR closets are hanging over their heads?) and now the debt is projected to be 18.2 Trillion according to the latest news.
And here’s another thing that has me boiling: Illegal bullying by Treasury and IRS includes a 3.8% tax on all hapless victims caught in the spider’s trap to pay for Obamacare!
Immigrants in the US (not in a high paying job) have no clue about this. Many send money (after tax money) back to their home country for their family support, to save for their retirement, never brought the funds to the US cause they figure their original home country knew about it, they have family in their home country who left an inheritance, joint accounts or they have homes or whatever in their home country. Taxes are paid on it in the home country already. Many immigrants.. no matter the generations.. have 2 lives… one in the US & one in their home country. They split their time between, file their taxes as if they reside in each country on all they make in that country separately. I never even knew about the foreign credit since I did my own taxes, I am not saying I am the sharpest pencil but I thought I had some common sense.. so that strategy to me seemed fine. I made money in that country… I pay the taxes there. Alot of the older immigrants have multiple residence cards cause it allows them choices. US has changed the game for every single one of us as a gc holder. US has a bunch of ducks sitting in the barrel (US land) & will shoot them all in that tiny space & each will be ruined then to make sure the salt is good & in… they will & can be booted out of the US… poorer then when they arrived. When I speak to others… US or Canadians… about this… they think I am paranoid & its nonsense. Or US people who say… u should know the rules. I thought I did.. I am not a US citizen… I have no rights or votes… so basically u change the rules & I got nothing to say except bow my head & answer… yes master… So to the ones who keep harping… change it to the residences in the US to be taxed on offshore then the US should have educated immigrants on this crap. If AARP (similar to Carp) can track elders down to tell them about their membership… I am damn sure Immigration can do the same instead… give me a blank check… we will fill it out…
@omgheesstillanamerican:
Making other arrangements regarding banking is always a good idea when it comes to the unknown and with FATCA it will ALWAYS be the unknown regardless of a signed IGA.
The lynchpin of FATCA IGA signing with Canada is supposed to be RECIPROCITY and it will NOT and CANNOT happen. Which makes this capitulation by our government so egregious. They know US will not reciprocate. Banking in the US will not tolerate it nor will Congress. But, as long as Treasury and IRS can illegally bully and pull the wool over naieve eyes ( and I did think our reps in Canada had more moxie than they have shown in this instance) they will wink, wink and nudge , nudge their way around the world until they come up on an immovable object ( say, like CHINA!)
While they harass and generally annoy conservative and tea party groups in the US, holding them back illegally from forming PACS and generating contributions to fight them in the next election, they continue their global maurading and pillaging with no one with the cajones to stand up to them.
This is all to appease Canadian bankers who were shaking in their boots and hiding behind the skirt of Mother Canada while we are thrown to the wolves.
All Canada had to do was say NO and SLAM the door!
And while we are at it, how does the government of Canada square negotiating with the IRS when the IRS has NO authority to negotiate anything with anybody. No authority from Congress whatsoever. Does that not make any agreement null and void?
@US_Person_Foreigner….your post rocks….keep it up….hopefully this hiliting of the reporting hammer on immigrant workers to USA wlll encourage them to seek alternative countiries to reside in and benfit… as these alt countires practise RBT so much fairer….informatoin rules!
@FuriousAC
Interesting point, re: “Does that not make any agreement null and void?”
@crystal london
Thanks… I am tired of being scared… but u are correct… info is the power one needs. This web site has different opinions & outlooks. We are in the same boat so I know all understands.
I read an article.. don’t remember where.. rich chinese are giving back their US citizenship or GC & getting out of the US because of this FATCA crap. Same rich people who own majority of the really pricy real estate in the US. Read how one person from China bought the most expensive apartment on record in NY for her toddler son so if he decided to go to school in NY.. he had a place to live…. lol. Fatca is not only hurting the low to middle classes. Its driving away the extremely wealthy because like us… we don’t want the frigging world to know all our details. Its none of their frigging business
This quote by Petros says it all: “Many Homelanders are a special breed of bigot who believe that you live abroad so that you can shirk your responsibility to pay for their Social Security, their Food Stamps, their welfare, and their wars across the globe.” Damned sick and tired of people telling me what my wife’s “fair share” is. There is no fair share when we get no benefits and no representation along with her US citizenship but are expected to pay everyone else’s way in life.
Here’s a graphic with Petros’ quote.
https://lh3.googleusercontent.com/-iDirS4uqnes/Uv1cJ7Nj5jI/AAAAAAAABxA/jEo-vHR4mHk/w976-h844-no/Homelanders_SpecialBigot.jpg
Ha. GREAT photo link.
And that nails it doesn’t it?
And then, let’s look at those crossing into the US from Mexico who take jobs , make a living, use health care, educational facilities, etc. AND send money HOME to Mexico where they are able to have whatever they want to and can afford to have in their home country. Mexico is Residency based for taxation. So, when it comes to the bottom line, EVERY welfare recipient and illegal alien in the US has more rights than we do, regardless of our designation by the IRS as U.S. Person..( whatever that means because Canada left it up to the IRS to determine at their whim just what that does mean and when it means it.)
Really, HOW can that be justified?
Less rights in those in the US than those who are welfare recipients and illegal aliens, and…
Less rights than in Canada than any other Canadian — no matter where they may be from or where their parents may be from.
@OMG
I love the picture IT is Perfect!
@MonaLisa.
I know what you are feeling about relatives not having empathy or understanding what you are going through. If it were not for you and all the rest of the Brockers and MSB I would have been either dead or in the insane ward. Even my son who lives in your neck of the woods will not be interested in FATCA. I just don’t understand it.
@FuriousAC
Not to be mean but u are starting to sound like the homelanders. The mexicans u speak about do the jobs no other american wants at way below minimum wage & they work long hrs that would be considered slavery because there is no overtime for their work. Americans also are on welfare & use all the things the gov’t has to offer & pay zero dollars in taxes also & how are they any better wearing their designer clothes & driving expensive cars. Yes the illegals pay zero tax dollars but the money they send home is to support their other family at home who have nothing. Immigrants will do any work they can to earn a living without saying its beneath them where the homelanders constant whine about human rights.. blah…blah… I am sorry, I am not trying to be offensive but it irks me when I see on the other boards the same thing… whine… whine… they do nothing.. we got to carry them.. No.. immigrants carry u… what homelander is willing to work in their conditions?
@Northernstar, it’s not that they are being mean, really; it’s more that they can’t fully grasp it all. Some think I’ve been alarmist and over-reacted while others believe I should have been more aware of all the filing requirements; some have expressed that they wouldn’t have ‘allowed’ me to marry my British husband and settle abroad. Another thinks that my accountant has taken advantage and overcharged me, etc. It’s just so far removed from their experience or any of their friends.
They’ve actually been pretty good in that none of them have condemned my decision but have expressed that it’s a shame. And, yet, don’t think any of them would have been happily prepared to rescue me had the SHTF. I’ve made my bed…
@US_Person_Foreigner
I think you have empathy. I can recall my grandparents history of coming as teenagers from Poland to the USA…They worked menial jobs. My grandfather worked labor jobs but also made whiskey on the side in the 20s. He saved his profits and bought land. He worked in Hercules as a blue collar labourer for all the time I knew him and i am 66 now. When he retired he still had to work because it felt it was what he had to do. He died of a heart attack putting on his socks to go to work as a school guard. He was in his 80s WHen he was working in Hercules he walked to work and never missed a day sick or was late. It took him almost two hours to walk one way..
I had a friend who worked in Arizona during the depression of the late 70/80s. He described the illegals and himself working long hours, no lunch breaks . My friend (white, from Ohio) took a break and came back and was fired. My friend had twin girls, 3 years old, he was raising them alone. Life is cruel. People end up in circumstances not planned.. Just because you are poor it does not make you a bad person. All those illegals working under the table are hired by rich folks avoiding paying decent wages and taxes.
As an immigrant to Canada I was welcomed by Canadians in 1969… I appreciated my neighbors giving me their dishes and pots and pans and bedding that they didn’t need.
Now I feel like a criminal by my own Canadian government. They want to send my banking records to the IRS who will send it to the US Treasury of Criminal Investigation Unit. It is mind boggling
@Mona Lisa
If they did not write to their congressman/woman then they think CBT is okay and like you said you made your bed.
I remember when I first found the Isaac Brock Society I didn’t post for a while because I thought all these people must be millionaires otherwise how could they have such a problem. But the more I read the more I realized they were just regular people and holy crap so is my husband and he’s got the same problem all these Isaac Brock Society people have.
What we all are in for here is the fact that our government does not care about us one bit. You know, I grew up in poverty myself and made a good life for myself because I was not stupid. I was always able to see garbage for what it was. I became a master at reading between the lines and seeing the whole truth in things. The facts here are very simple. Lately, I have been asking why Flaherty never answered my letter. I need to go back to my “between the lines” skill set to unscramble the latest happenings. When the letter was not answered, I knew why. Calling his office 3 times and being told it was “next” to be answered was pure BS and I knew that. The reason Lynnes questions were not answered is for the same reason. The Canadian government deliberately did not answer just as now, my local MP won’t return calls or emails. They are using us as a “tool” for bargaining with the USA. This is so far over our heads, our strategies are useless.It was known, in back door deals, we were just tools and leverage and nothing more. Do you think they care to hear of people’s life tragedies because of this? Hell no. To them, you are nothing. Money rises above everyone. The banks are far more important than any of your lives. Our privacy? it is worthless to them as well. Someone needs to start telling the truth around here and the time is now. Unless we come up with something large, they are going to get away with this and you are worthless to them. Sorry, this is the way it is. They need us to stay weak, as we seem to be now. We need support on a massive scale here to put Canadian law first. I wish I could take back ALL taxes paid to the Canadian government as I got cheated! I as a Canadian am pissed and ashamed at the same time at this waste of a government. We are a bunch of sob stories to them, no compassion no care for us and not one answer to our letters of concern. Off with Harpers head!
@ All. I watched a show last night on Aljizeera (sp?) about the ongoing US government deportation of more than 1000 people per day back to Mexico. This is a new policy straight from Obama which adds up to about 400,000 deportations per year. Many of the deportees have been in the US for decades, have married, have children born in the US (i.e. who are US citizens) and have worked for years at menial jobs to support their families because they have no choice; they are “undocumented”.
These poor deportees wind up back on the streets in Mexico with no money, no family, and no prospects. The Mexican government has had to set up temporary housing similar to the housing for homeless people we see here in Canada. Their families are torn apart, they have no connections or support in Mexico, and in some cases do not even speak Spanish. The children who are left behind in the US are rendered fatherless or motherless with no family income. The only option left for these people is to attempt to reenter the US illegally.
As I watched this show my thought was “I wish there were some way I could give my US citizenship to one of these poor souls. It would solve both our problems”. The US government in its majesty screws us because we ARE US citizens and it screws these poor Mexicans because they ARE NOT US citizens.
NativeCanadian said Off with Harpers head!
Be careful what you say. Some people take things literally.
@northernstar
I never thought in my life time that working hard & playing by the rules would come to being called a criminal also. None of us thought that we would ever have that attached to our names. Our gov’t did that to us… not giving a rat’s butt they did it either. All those in the canadian gov’t who agreed to this… Those u betrayed have a long memory… I will vote for anyone who had nothing to do with this. U have given away Canada for free… U get nothing in return… nothing but our contempt & anger.
Attention Edward Snowden and Sen. Rand Paul fans;
Sen. Rand Paul has filed a class-action law suit against Obama administration and the NSA.
http://www.infowars.com/sen-paul-sues-president-obama-over-nsa-call-surveillance/
I simply do not know what to say to those comments. US_Person_Foreigner
I find it stunning you would get that from my comments.
Illegal is a word with meaning. “Undocumented” is a misnomer used to urge and gain sympathy towards the millions who are in the country illegally. There is no doubt many are victims used by and urged by the large companies who want cheap labour. Thereby cheating citizens in the country and those they are exploiting because they are poor and want a better life. The victims are at the mercy of those who mule them across and in abject conditions and many horror stories are told about how many are abused , used and killed and never make it.
It is the exploitation of these people and as a result the exploitation of those who are entering the country legally by the means afforded.
IF our borders are not secure we have NO sovereignty.
And to get back to the subject: the FATCA IGA signed by our government IS an illegal entry into not only the country but into our entire lives in the most egregious and intimate way.